Smart Financial Planning in an Era of Upheaval

Earlier this year, WIH professor/financial planner Bill Frisco was listed as one of the 2014 Top 400 Advisers by the US Financial Times (the main rival to theWall Street Journal). Founded in Britain in 1888, the US Financial Times is an international newspaper that places a special emphasis on business and economic news. Inclusion in this list is based on analysis of assets under management, their growth rates, years of experience, compliance record, and industry certifications. Bill Frisco’s upcoming class “Coping And Surviving In A New Financial World: Current Estate And Tax Laws” offers essential information on navigating our finances in a changing – often chaotic – financial period. We visited with Bill to find out more.

WIH Reporter: What is the most important thing we need to know about your upcoming class?

Frisco: I am excited that the class will cover all of the important aspects of financial planning. A board certified estate planning attorney will discuss ways to reduce estate taxes, and the best strategies to pass assets to your heirs and charities. A CPA will help you decipher all the new tax law changes and discuss strategies to minimize your income taxes. I will discuss how these areas impact your investment decisions. In addition, I will review retirement income distribution strategies, ways to improve your income portfolios, and strategies to reduce risk in your investment portfolio.

WIH Reporter: What can you tell us about today’s economic environment?

Frisco: This current environment is truly different. In every asset category, there is risk. There is risk in cash (i.e. the return on safe liquid accounts is less than inflation). There is risk in stocks, commodities, real estate, and especially bonds because of the historically low interest rate. Ten years ago, clients would ask me “Bill, what is a safe investment I can put my money in?”, and I could always find one area that had very little risk. Today, I just cannot do that. This means that individuals need to be diligent in globally diversifying their investment portfolios in stocks, real estate, commodities, and bonds, and they need to periodically re-balance their portfolio based on the current economic environment.

WIH Reporter: What are some of the most challenging issues you have come up against in working with your clients?

Frisco: For me, the most challenging and yet rewarding financial planning experiences always involve working with someone who has recently lost a loved one. These planning situations are always highly emotional and very difficult because in most cases the surviving spouse is not familiar with their investments and is not knowledgeable about managing an investment portfolio. My first goal in these situations is to always listen to all of their concerns, fears, and major issues. The next step is to educate the individual in areas that impact them the most. I have learned over the years that the most effective way to reduce anxiety in individuals who are dealing with their investments is to familiarize them with the benefits and risks associated with each investment. The final step is to develop a financial plan or road map based on their risk tolerance and objectives. It is very rewarding for me to watch the positive changes that occur in individuals as they work through this process.

WIH Reporter: What should we look for in a financial adviser?

Frisco: A financial adviser should be knowledgeable, experienced, and above all have a high degree of objectivity. In addition, a financial adviser must be a great listener.

WIH Reporter: Many of us don’t know that you have been a pilot for many years. What lessons can be learned by comparing flying to investing?

Frisco: I have flown many type of different planes from sea planes to gliders. Flying is very similar to investing. In flying as in investing you will make mistakes. The question is how quickly can you correct them? My first flight instructor, who now flies jets for Delta airlines, told me “a mistake is not an error unless you fail to correct it.” Down here, it is easy to procrastinate and put off decisions. Up there, you are trained to correct things immediately before they become disasters. It is always better to make a larger number of smaller corrections than to wait and make one big correction when sometimes it may be too late.

(Bill Frisco’s 5-week class, “Coping And Surviving In A New Financial World: Current Estate And Tax Laws” takes place on Thursday, October 23 from 10:00 am to 12:00 pm. For more information about the class, click here.)